Microsoft DSP closure reshapes programmatic ad buying landscape

The news: Microsoft announced in May that it will shutter its demand-side platform (DSP) Invest, formerly known as AppNexus and managed by subsidiary Xandr. The platform will be replaced by an AI-driven buying process focused exclusively on Microsoft’s ecosystem, including Xbox, LinkedIn, Bing, and Windows. This move marks a significant shift in the programmatic ad buying landscape, as Big Tech companies increasingly prioritize their own inventory over third-party ad spaces.

• Big Tech’s retreat: Companies like Microsoft and Meta are stepping back from managing third-party ad inventory, opting instead to focus on their own platforms and services.
• Regulatory pressures: Recent rulings against Google’s ad tech monopolies have heightened regulatory risks, prompting tech giants to avoid third-party ad management. A federal judge recently ruled that Google maintains illegal monopolies in the ad server and exchange markets, potentially forcing the company to divest parts of its business.

Advertiser reactions: While some advertisers lamented the loss of Invest’s robust analytics, others noted the industry’s broader trend toward simplified, AI-driven buying processes.

• Luca Filardo, SVP at Adlook, highlighted the shift: “Platforms are embracing new technologies aimed at simplifying how marketers access media across all key stages—from planning to activation and execution.”
• Jeremy Haft, CRO at Digital Remedy, emphasized the need for human oversight: “Marketers are open to simplified tools, but they still value control, transparency, and the ability to apply human judgment.”

Opportunities for smaller players: With Big Tech stepping back, smaller ad tech firms like The Trade Desk could fill the gap. The open web remains a significant channel for advertisers, but expectations for performance and transparency have risen.

• Filardo noted: “If we compare consumer time spent on the open web versus walled gardens, it’s clear that budget allocation remains uneven. Marketers have a strong appetite to invest in the open web.”
• Haft added: “Third-party inventory must show clear performance. With more focus on accountability, the combination of transparent data, smart tech, and human optimization is what drives value.”

This transition underscores the evolving dynamics of programmatic advertising, where automation and ecosystem control are reshaping how ads are bought and sold.